APPROACHING
Hybrid plans
Retirement used to be easy – you either bought an annuity or chose income
drawdown. The new pension freedoms offer you far greater choice, but also
bring greater responsibility.
You now have unprecedented access to your pension
savings and what you do from the age of 55 may have
profound implications for your later life.
If you decide that an uncrystallised funds pension
lump sum (UFPLS) is not for you – and the name alone
may have put you off – you still need to make a decision.
?
Should you draw regular income from a
flexi-access arrangement or secure your
income for the rest of your life (or a fixed
period) with an annuity?
The beauty of flexi-access is it keeps your money
invested for as long as you want. You may generate
returns well above the rate of any annuity you could
have bought, but you certainly need to be
generating positive returns. That’s because you will
be drawing your income from this money and it has
to last for the rest of your life.
That doesn’t mean an annuity won’t be a part of your
future financial plans. Annuities provide insurance
against living longer than your money la